Breakthrough in German coalition talks / Energiewende costs "unknown"

The parties currently in talks to form Germany’s next government have agreed to speed up the roll-out of renewable energies and start the phase-out of coal-fired power generation. Contrary to a draft leaked earlier this week, the blueprint agreement between Chancellor Angela Merkel’s conservative CDU/CSU alliance and the Social Democrats (SPD) no longer explicitly postpones Germany's 2020 climate target. The parties now have to decide whether to enter formal negotiations on a renewal of the grand coalition, which are likely to last many weeks.

The total cost of Germany’s energy transition cannot be calculated merely by adding up the costs of individual assets, as some costs would arise even without a shift towards a decarbonised energy system, the German Federal Government writes in an answer to a parliamentary inquiry by the nationalist AfD party. “The Energiewende’s costs can only be calculated by comparing an energy system in transition to another one that does not include this feature,” but such a comparison was “not known to the government,” it said. The government added that a cost calculation would also have to include follow-up costs “caused by environmental pollution, damages to public health and long-term consequences of unabated climate change.” By contrast, the government provided figures to an additional AfD inquiry on the support costs for renewable energy sources, which are said to amount to an average of “about 19 billion euros per year” but could still vary depending on future power costs.

German households that reduce their power consumption are being “punished” by paying relatively more for every unit they use, energy think tank Agora Energiewende* says in a press release. "Poor or thrifty power consumers are faring comparatively worse when it comes to power prices," Agora head Patrick Graichen says. The reason for this was that the basic charge, which includes grid fees, is paid by all consumers irrespective of their consumption levels. Basic charges are on the rise, whereas kilowatt-hour (kWh) rates stagnate or decrease, the think tank says. A household consuming only 1,000 kilowatt hours (kWh) per year pays up to 15 cents per kWh in grid fees while an average consumption of 4,000 kWh per year roughly halves fees per kWh to only 7 cents. "From a social and ecological perspective, this is extremely questionable", Graichen adds.

Offshore wind power generation in German waters has passed a symbolic threshold, as the number of wind turbines exceeded 1,000 for the first time, Kai Eckert writes for energy industry magazine Energie & Management. According to figures of the Federal Maritime and Hydrographic Agency of Germany (BSH), Germany now boasts 1,028 offshore wind turbines with a capacity of 4,600 megawatts (MW) in its exclusive economic zone, starting 15 kilometres off the coasts of the North Sea and the Baltic Sea, the article says. Germany’s Renewables Act stipulates that total offshore wind power capacity grow to 6,500 MW by 2020 and to 15,000 MW by 2030. In 2016, offshore wind power generated 12.4 billion kilowatt hours of electricity, “theoretically enough to power the city of Hamburg entirely,” Eckert writes. In a separate article, website Spiegel Online says the BSH estimates that about 10-15 percent of Germany’s total North Sea area could be needed for the expansion of offshore wind power in the long run. Environmental organisations warn that the sea should not be turned into “an industrial zone”, the article says, but BSH head Monika Breuch-Moritz says a large share of the German North Sea consists of protected areas that would not be affected by offshore wind power expansion.

Find the Energie & Management article in German here and the Spiegel Online article in German here (paywall).

Environmental organisations NABU and WWF have urged Germany’s parties, currently negotiating to form a government, to stop the natural gas pipeline project Nord Stream 2, a joint press release by the two organisations says. In an open letter to party leaders of the conservative CDU/CSU alliance and the Social Demcorats (SPD), the conservationists say the pipeline that connects Germany with Russia via the Baltic Sea is a “climate policy cul-de-sac” that threatens the sea’s fragile eco system and erodes solidarity between member countries of the European Union. Nord Stream 2 not only puts Germany’s role as a trailblazer in climate protection in jeopardy but also fails to contribute to the diversification of the country’s energy supply by increasing the dependence on Russia, they say. The project that crosses several marine natural reserves has a planned operating time of 50 years, meaning that it would deliver natural gas well beyond 2050, the target year of the Paris Agreement by which Germany has pledged to do without fossil energy sources, NABU and WWF say.

Sulphates unearthed by open pit mining in the eastern German coal region Lusatia could lead to a surge in diarrhoea cases in the capital Berlin, environmental organisation NABU says, based on an analysis by the Brandenburg State Office for Mining, Geology and Raw Materials (LBGR). “Both active and retired open pit mines leak sulphates that the river Spree flushes from Lusatia to Berlin,” a NABU press release says. While sulphate is not poisonous, it could cause diarrhoea and vomiting in larger doses, especially in infants and toddlers, and put a strain on waterborne species, the conservationist organisation says. The LBGR has confirmed suspicions that sulphate concentration in the river Spree and other water bodies near the lignite mining region have increased in recent years and now are over the threshold for clean water. The LBGR concludes that “a reduction in active mining activities” could contribute to abating the pollution, NABU says.

Germans like to think their country is a climate protection pioneer, but other countries like China and France have more clearly understood what the Paris Agreement means for the economy, and have taken the bull by the horns, writes Carola von Schmettow, head of British bank HSBC operations in Germany, in a guest commentary in Wirtschaftswoche. “While other countries are using the Paris Agreement to actively shape the transition to a climate-neutral economy, little is happening in Germany,” she writes with reference to this week’s reports Germany would abandon its 2020 climate targets. Schmettow cites green finance initiatives in both countries as examples, as well as France’s emphasis on climate risks on capital markets. She argues Germany should get moving on these issues, because inaction could quickly lead to economic disadvantages.

Current discussions about the future of transport tend to revolve around electric cars, but many German research projects are focusing on renewable liquid fuels, which are likely to play an important role for freight transport, shipping and aviation, writes Katharina Menne in weekly paper Die Zeit. While some researchers are betting on biofuels, others are concentrating on using carbon capture as a basis for making fuels, or on creating entirely new designer fuels that would drastically cut local emissions. But at present, synthetic fuels remain expensive, she says. In addition, policymakers should offer incentives for all technologies instead of just focusing on electric mobility, Menne writes.

Germany’s likely failure to meet 2020 climate targets highlights the question of what direction energy policy should take in the future, according to the Institute for Economic Research (ifo). A collection of short papers by contributors such as Claudia Kemfert (DIW German Institute for Economic Research), Manfred Fischedick (Wuppertal Institute), Marc Oliver Bettzüge (Köln University) and Felix Matthes (Institute for Applied Ecology) highlights how economists’ views differ on the issue.

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